Air Canada Reports Fourth Quarter and Full Year 2025 Financial Results

Air Canada reported its financial results for the fourth quarter and full year 2025 and provided its outlook for the full year 2026.

“Air Canada finished 2025 with a solid fourth quarter, delivering record revenues of $5.8 billion and achieving strong year‑over‑year earnings growth. For the full year, we generated $918 million in operating income and $3.1 billion in adjusted EBITDA. These results reflect our disciplined actions throughout the year, the strength of our commercial strategy, the loyalty of our customers, and—above all—the dedication and professionalism of our employees. I want to sincerely thank them for their hard work through a demanding year and through the severe cold and record snowfall of recent storms,” said Michael Rousseau, President and Chief Executive of Air Canada.

“We delivered these results while effectively managing shifting demand trends, a labour disruption in the summer, and continued macroeconomic and geopolitical uncertainty. We maintained our focus on operational reliability, advanced our cost‑reduction initiatives, and generated solid free cash flow, reinforcing the resilience of our business model and supporting disciplined capital allocation, including meaningful share repurchases.”

“As we look ahead to 2026, we are encouraged by the strong momentum in bookings and the opportunities created by our next phase of fleet investments. At the same time, we remain sharply focused on cost management, productivity, cash generation, and preserving balance‑sheet flexibility. Air Canada enters 2026 from a position of strength, and we remain committed to creating sustained value for our customers, employees, and shareholders,” said Mr. Rousseau.

_{^*Adjusted CASM, adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and impairment), adjusted EBITDA margin, leverage ratio, net debt, adjusted pre-tax income (loss), adjusted net income (loss), adjusted earnings (loss) per share – diluted, and free cash flow are referred to in this news release. Such measures are non-GAAP financial measures, non-GAAP ratios, or supplementary financial measures, are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results. Refer to the «Non-GAAP Financial Measures» section of this news release for descriptions of these measures, and for a reconciliation of Air Canada non-GAAP measures used in this news release to the most comparable GAAP financial measure.}

Fourth Quarter 2025 Financial Results

• Operating revenues of $5.770 billion
• Operating expenses of $5.446 billion
• Operating income of $324 million with an operating margin of 5.6% and adjusted EBITDA of $867 million with an adjusted EBITDA margin* of 15.0%
• Income before income taxes of $342 million and adjusted pre-tax income of $244 million
• Net income of $296 million and diluted earnings per share of $1.00
• Adjusted net income* of $191 million and adjusted earnings per diluted share of $0.65
• Adjusted CASM* of 15.34 cents
• Net cash flows from operating activities of $423 million and free cash flow of negative $478 million

Full Year 2025 Financial Results

• Operating revenues of $22.372 billion
• Operating expenses of $21.454 billion
• Operating income of $918 million with an operating margin of 4.1% and adjusted EBITDA of $3.124 billion with an adjusted EBITDA margin of 14.0%
• Income before income taxes of $789 million and adjusted pre-tax income of $658 million
• Net income of $644 million and diluted earnings per share of $1.86
• Adjusted net income of $471 million and adjusted earnings per diluted share of $1.47
• Adjusted CASM* of 14.72 cents
• Net cash flows from operating activities of $3.657 billion and free cash flow of $747 million
• Long-term debt and lease liabilities of $11.576 billion and leverage ratio* of 1.7x

Outlook

For the first quarter of 2026, Air Canada plans to increase its operated capacity by about 2.5 per cent from the same quarter in 2025.

Air Canada is providing the following guidance for the full year 2026.

Major Assumptions

Air Canada made assumptions in providing its guidance—including a modest Canadian GDP growth for 2026. Air Canada assumes that the Canadian dollar will trade, on average, at C$1.36 per U.S. dollar for the full year 2026 and that the price of jet fuel will average C$0.90 per litre for the full year 2026.

Air Canada has entered into non-binding letters for up to $2 billion in sale and leaseback transactions scheduled to close in 2026 and 2027, subject to the execution of definitive and binding agreements and completion of standard conditions precedent. As part of the assumptions for 2026 guidance, Air Canada has assumed execution on its sale-leaseback transactions for $1 billion in 2026.

Air Canada’s guidance constitutes forward-looking information within the meaning of applicable securities laws and is subject to important risks and uncertainties, including in relation to statements or actions by governments and uncertainty relating to the imposition of (or threats to impose) tariffs on Canadian exports or imports and their resulting impacts on the Canadian, North American and global economies and travel demand. Please see the discussion below under Caution Regarding Forward-looking Information.

2028 targets and 2030 aspirations

Air Canada announced the following long-term 2028 financial targets and 2030 aspirations in December 2024:

_{^*Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and impairment), adjusted EBITDA margin, net cash flows from operating activities as a percentage of adjusted EBITDA, additions to property, equipment and intangible assets as a percentage of operating revenues, free cash flow margin and return on invested capital are referred to in this news release. Such measures are non-GAAP financial measures, non-GAAP ratios, or supplementary financial measures, are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results. Refer to the «Non-GAAP Financial Measures» section of this news release for descriptions of these measures, and for a reconciliation of Air Canada non-GAAP measures used in this news release to the most comparable GAAP financial measure…}